What's Icahn's interest in Amylin? Ill-timed purchases of stock in 2008 -- in the mistaken belief that the shares were undervalued, according to a May 2008 regulatory filing. The billionaire investor's position of approximately 11.4 million shares, acquired at an estimated purchase of $26.23 a share, has lost almost 58 percent in value, as prescription sales of Amylin's lead product Byetta, the diabetes medication sold in partnership with Eli Lilly, slowed to a crawl in the second-half 2008 after the FDA announced several severe cases of acute pancreatitis among patients taking the drug.

The obvious premium-payer for Icahn's shares is, again, Eli Lilly. Lilly and Amylin already have a joint deal to market Byetta, Amylin's second-line diabetes drug. Lilly's sales force would not need to be educated on the drug.

Plus, the company isn't worth a great deal. It has a market cap of about $1.5 billion, because Amylin only loses money.
Icahn may be hoping that Lilly or a rival could be tempted to move quickly, before the FDA adds any more drugs to an already crowded market. Forbes:

Both Byetta and LAR would likely face competition from Novo Nordisk's developing liraglutide, which would be taken once-daily. Competition within the field is growing, with Merck & Co.'s Januvia already on the market, and Bristol-Myers Squibb Co. and AstraZeneca developing a treatment called saxagliptin.*